California Suspends ‘Business Relationships’ With Wells Fargo
- State is largest muni issuer, has $75 billion in investments
- Bank is facing mounting criticism over bogus accounts
Wells Fargo CEO Stumpf Forfeits $41 Million in Pay
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California, the nation’s largest issuer of municipal bonds, is barring Wells Fargo & Co. from underwriting state debt and handling its banking transactions after the company admitted to opening potentially millions of bogus customer accounts.
The suspension, in effect immediately, will remain in place for 12 months. A "permanent severance" will occur if the bank doesn’t change its practices, State Treasurer John Chiang said Wednesday. The state also won’t add to its investments in Wells Fargo securities. Chiang already replaced Wells Fargo with Loop Capital for two muni deals totaling about $527 million that will be sold next week.